Pricing Of Contingent Claims And Contract Design Of Venture Capital In Internet Companies

The development of risk investment in our country indicates that risk investment is conducive to China’s Internet technology,according to the relevant statistics,the internet industry is still one of the most favored industries for the risk of investors.However,the researches on venture capital contract design for Internet companies are less.Before the establishment of venture capital contract model,this paper analysis the contingent claims related to contract terms.This paper discusses the contingent claim from two aspects about the real options.Delay options in the investment of the Internet by Internet companies due to the uncertainty of the evaluation of the project and internet enterprise executive stock options in terms of payment terms.This option income of executives is uncertain,it will change with the price of a company.This paper uses the principal-agent theory and designs incentive model and gives examples of terms for Internet companies staged investment.Solving model about internet companies’ degree of effort and analyzing the main factors which influence it.The numerical simulation analysis is carried out though Matlab.There are the results of the analysis.Base salary,performance sharing of Internet business executives and internet business executives efforts into the same trend change.Phased investment ratio and internet business executives efforts of stage 1 into the reverse trend,which is into the same trend in the stage 2.Share of the total share capital and internet business executives efforts into the same trend when there is an executive stock option.The exercise price of stock option and internet business executives efforts into the reverse trend.After empirical analysis of the solution of the model,this paper puts forward some relevant suggestions based on the results of the study to the internet companies,venture capital institutions and their regulatory authorities,economic policy makers.Finally,this paper selects the case to verify the mathematical derivation and numerical simulation results and make an example for the design of the contract.